Engineering Physics: Moving Forward After Setback

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marshmallows
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Hello all! :D I am going into my third year (second year in major) in university working towards a four year bachelor's degree majoring in physics. I talked to a prof/advisor about transferring into engineering physics and he encouraged me to transfer but procrastination and laziness got the best of me and I didn't end up getting accepted :(

Luckily, I am able to continue taking classes which will transfer over into EP but I feel terrible about my second year grades and I'm not sure what to do. My parents are putting a lot of pressure on me because they don't want to waste money on my education and I feel like I let them down because I didn't get into the college.

I am also worried that I won't be able to get into grad school later on because of my bad grades. I'm hoping I can retake my mechanics I and a probability stats class to improve my mark...

Any advice or comments are greatly appreciated!
 
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As I hear it, bad grades can be offset by good letters of recommendation, etc, when applying for Grad School.